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What’s up, everyone? Today, we’re covering some highlights from Lincoln Archibald and Clay Gordon’s interview about doing 80 VC deals in 7 years!
Stout Street Capital is an seed-stage fund that seeks to invest in early-stage companies focused on improving efficiency and generating bottom-line value in large established sectors in the market.
Stout Street’s Value Fund-II is currently focused on post-revenue, seed-to-series-A investments in companies valued at less than $10 million (See LinkedIn).
Future and Past
Clay: We invested in 36 companies in fund i, 31 in fund ii, and are now investing in about 15 companies for fund iii aiming for 40.
We have about $25M AUM with our check sizes in the $250K range.
Our target is to own 2-3% of the company when we invest in it.
Lincoln: What does the future look like for Stout?
Clay: We’d love to scale, and we’re aiming to do so, but at the same time we’re trying to build a VC firm that is predictable from a return profile.
Lincoln: How’d you get started?
Clay: It was pretty spontaneous. We worked with a lot of retired individuals were looking for places to allocate their money, but their only connections were friends and family.
Stout simply wanted to make these great deals available to multiple people, and saw that the fund structure was the best way to reach that goal.
We looked to invest in seed companies that were already generating revenue, than just an idea in a garage.
Hard Knocks and Advice
Lincoln: What was the hardest part about kicking off your first fund?
Clay: The hardest part was solidifying enough relationships. It took us 2 years to get enough people in our circle and deal flow.
Some people thinks this stuff can happen overnight but it can’t, it’s made possible through daily investments.
Lincoln: What’s something you wish you knew when you started out?
Clay: I would push to have my own experience.
I would stick to my investment thesis and meet interested individuals than just find out what the big investors want and cater to their preferences.
Conclusion
Those are a few highlights about Stout Street Capital doing 80 VC deals in 7 years but click here to listen to the rest!
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DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the authors.
